Flotation Costs

question 16

Multiple Choice

Flotation costs:

• A) Reduce each of the cash inflows for a project.
• B) Represent a recovery item at the end of a project.
• C) Should be ignored as they are a financing cost, not a project cost.
• D) Increase a project's cost of capital.
• E) Should be included as an initial cash outflow of the project.

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Definitions:

Two Way ANOVA

A statistical test used to determine the effect of two nominal predictor variables on a continuous outcome variable.

Interaction

In statistics, an occurrence when the effect of one variable depends on the level of another variable.

Main Effects

Refers to the direct impact of independent variables on dependent variables in a statistical model, without considering interactions between variables.

Total Mean

The overall average value of a dataset, calculated by summing all observations and dividing by the total number of observations.